1983 (6) TMI 63 - AT - Wealth-tax

Summary

Issues:
1. Disputed deletion of Rs. 33,622 from the net wealth of the assessee.
2. Recomputation of the assessee's share in the value of 40% share of HUF in M/s Aero Engg. Works.
3. Denial of exemption to the assessee u/s 5(1)(xxxii) and 5(1)(iv) of the WT Act.
4. Valuation of shares held by the assessee in M/s Aero International Exports (P) Ltd.

Analysis:

1. The appeal and cross objection under the WT Act for the year 1975-76 raised common issues regarding the deletion of Rs. 33,622 from the assessee's net wealth. The revenue disputed this deletion related to the assessee's 1/3rd share in the addition made in the case of M/s Aero Engineering Works. The assessee, on the other hand, disputed the denial of exemption under specific sections of the WT Act and the valuation of shares in M/s Aero International Exports (P) Ltd.

2. The facts revealed that a partial partition was effected in the HUF, resulting in Sohan Lal, the husband, holding a 40% share in M/s Aero Engg. Works. The HUF divided this share equally among Sohan Lal, the assessee, and their minor son. The WTO made an addition to the assessee's wealth based on this share, which was disputed by both parties. The AAC directed the recomputation of the assessee's share, leading to grievances from both the revenue and the assessee.

3. The Departmental representative argued that the assessee, not being a partner in the firm, was not eligible for exemptions under specific sections. However, the assessee's counsel contended that the assessee had overriding title due to the partial partition, as established in previous cases. The Tribunal upheld the assessee's overriding title and directed the WTO to allow exemptions under the relevant sections and recomputed the value of the assessee's share.

4. The Tribunal found that the revenue should maintain consistency in its treatment of exemptions, especially when similar cases had been decided in favor of the assessee and her husband in previous years. The matter was remanded back to the WTO for reevaluation and proper consideration of the exemptions and valuation of shares, based on the Tribunal's findings.

5. The Tribunal concluded that the revenue's appeal and the assessee's cross objection were partly allowed for statistical purposes, with specific directions given for the reevaluation of the assessee's share and the granting of exemptions under the WT Act. The Tribunal emphasized the importance of consistent treatment by the revenue in similar cases.